1. Field of the Invention
The present invention generally relates to a customer loyalty program and, in particular, to a method and system for enabling multiple payment options in loyalty transactions.
2. Description of Related Art
Customer loyalty programs were introduced by airlines, hotels, and rental cars etc. to retain their customers as well as to attract new customers. In many of these programs, a customer earns loyalty units (generally regarded as points, miles, etc) for undertaking some activity (E.g. taking flights on host airline or a partner airline or spending on a credit card of a card partner). The loyalty units which are earned in these programs can be redeemed for various goods and services offered as awards. The principle of a loyalty program is to retain an existing customer base as it is more expensive to bring in new customers than to retain existing ones.
The airline industry revolutionized the way customers were recognized for their loyalty by initiating customer loyalty programs. The central theme of these programs has been rewarding members (customers, who have enrolled in loyalty program) in some form of loyalty units for doing business with the airline or its loyalty program partners and thereby contributing to the revenue of the airline. Members are then allowed to purchase products and/or services on payment through the loyalty units they have earned.
The next generation loyalty programs would seek to reward loyalty based on the buying pattern of the members and thereby achieve meaningful distinction between members, based on various loyalty or business parameters. To elaborate the point above, for example an airline would like to reward its loyalty program members in ‘points’ for doing business with its non-air partners, in ‘miles’ for doing business with its air partners and in ‘miles’ and ‘status credits’ for doing business with itself Each type of loyalty unit earned by the member in the case above would then represent his buying pattern.
This would require the loyalty programs to have an ability to reward its members in different forms of loyalty units. This would also mean that the loyalty programs would need to offer multiple payment options in different loyalty units for products and/or services offered to the members for redemption. The complexity is further compounded with the practice of allowing part of the payment for redemption in monetary currency, should the member fall short of loyalty unit's balance. For example, if a redemption seat from Sydney (SYD) to Melbourne (MEL) costs 12,000 points and if the member has a balance of only 8,000 points, he can make payment in monetary currency (say 70 Australian Dollars) for the shortfall. The monetary currency used for payment of the shortfall may also vary based on member's preference. For example, an Australian may prefer to pay in AUD and a New Zealander may prefer to pay in New Zealand dollars (NZD). This would require airlines to have an ability to provide ‘(n+m)+(n×m)’ type of payment options for products and/or services, it offers on redemption where,    n=number of different types of loyalty units, loyalty program uses to reward the members of its loyalty program.    m=number of monetary currencies, loyalty program supports for receiving payment for redemption of products and/or services.
So if an airline uses three types of loyalty units to reward its members (points, miles and credits) and supports two monetary currencies (AUD and NZD), it would need an ability to offer 11 payment options for the members as redemption prices for the products and/or services. The different payment options are given as follows:    1. Points    2. Miles    3. Credits    4. AUD    5. NZD    6. Points+AUD    7. Miles+AUD    8. Credits+AUD    9. Points+NZD    10. Miles+NZD    11. Credits+NZD
Currently, due to system limitations, members in a loyalty program are only provided limited choices in terms of loyalty units, monetary currencies and combination of both as payment options. Current methods provide a predefined and static pricing in loyalty transactions. The price lists cannot be dynamically fetched from monetary currencies and loyalty units to offer the members with multiple payment options according to their choices. The variability in pricing currently available in loyalty programs is limited to a fixed combination of loyalty units and monetary currency. This impacts airline's ability to reward the members in different types of loyalty units, thereby causing limitations in achieving its Customer Relationship Management (CRM) objectives. Consequently, there exists a need for a system and a method for enabling multiple payment options available to the members in loyalty program transactions.